In a meeting with the SMSFA last week, Assistant Treasurer and Financial Services Minister Daniel Mulino reconfirmed the Treasurer’s intention to proceed with the proposed Division 296 legislation in its current form.
Peter Burgess, SMSF Association CEO, said a range of topics were discussed in the meeting with Mulino, including the $3 million super tax, the Delivering Better Financial Outcomes reforms, the Compensation Scheme of Last Resort and the Australian Financial Complaints Authority’s wholesale investor determinations.
“It was a very cordial meeting and laid the foundation for a strong ongoing working relationship,” Burgess said.
“We discussed the proposed Division 296 legislation in detail. We once again raised our concerns about the design of this tax, the unintended consequences, and we put forward alternative options.
“Unfortunately, there was no indication that the government was open to making changes, with the minister reconfirming the Treasurer’s intention to proceed with this tax in its current form.”
Burgess said the SMSFA wanted to reiterate to members that it had submitted a number of alternative options to Treasury regarding the Division 296 tax, despite comments from Jim Chalmers last week that no alternative approaches have been proposed.
“Over the past two years, the SMSFA has put forward several alternative options that would achieve the government’s policy outcomes without the complexity, cost, unintended consequences and disruption to the flow of investment funds so critical to productivity growth and innovation,” he said.
“The government’s Division 296 legislation started out as a proposal to tax unrealised gains and not index the cap, and there has been no deviation from these positions – despite compelling evidence of its potential deleterious impact on the wider economy.
“The absence of adjustments or receptivity to alternative views indicates that the consultation was merely a process to endorse a pre-decided policy position instead of a genuine effort to consider other views. Despite this, we will continue to advocate for changes to this ill-conceived legislation.”
The fact the government seems hellbent on pushing this through in its current format, even though it has obvious design flaws and there are much better ways of achieveing the same outcome, smacks of extreme hubris.
Or perhaps it’s just misplaced confidence in the moronic Treasury bureaucrats who designed it. If Chalmers wants to survive another election he needs to realise modern day Treasury bureaucrats are biased and incompetent, and should not be relied upon. When much smarter people offer free advice on alternative approaches, Chalmers & Mulino would do well to listen.
When Industry Super say they can’t work out taxable income for individual super accounts, then Treasury and ALP jump to find a solution that works for Industry Super Funds.
It’s called Regulatory Capture Corruption.
Disgusting